Telecom | Update

Sector Update | 16 October 2020

Telecom

Our earlier telecom update

The 5G Saga!

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The Indian telecom industry is seeing capex peak out (particularly for Bharti and RJio)

and increased free cash flows (FCF). However, risks have started emerging due to the

increased capex toward 5G technology upgrade and the upcoming spectrum renewal.

In this report, we discuss the global progress of 5G, spectrum and network dilemma

and the ecosystem development. We have also made an attempt to work out the

potential investments and timelines of 5G and spectrum renewal.

We believe that (a) investments in 5G is still some time away and may be spread over

~5 years cushioning the impact, (b) the one-time spectrum renewal is a bit delayed

and could be managed through the existing FCF of Bharti and RJio, (c) the shrinking

number of telcos in India may restrict risks of over-bidding.

5G progress: How far away is it for India?

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Our earlier telecom update

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Historically, India has been about 10 years behind developed countries in terms

of technology upgrades. However, the timeline for 4G was shorter as a new

player forced the entire ecosystem to upgrade with its will and vigor.

With no new players, nascent use cases, limited incremental revenue potential,

spectrum woes along with an inherently low ARPU structure in India, we believe

telcos may wait for the 5G technology to stabilize globally (more on this below)

and see reduction in equipment cost, before deploying fresh technology, which

could take 3-4 years.

This brings us to the global progress on 5G. With commercial launches done in

26 countries by operators (as at Jan’20), clearly 5G is gaining fast traction. 5G

subscribers though merely 10m in CY19, are estimated to increase to 2.8b by

CY25. However, the recent COVID-19 crisis has dented its pace of progress.

The US, South Korea and China are leading the 5G race. China is aggressively

ramping up its 5G network and has a target of adding 600k sites by CY20 (by its

top-3 operators). This could be the key trigger for global 5G acceptance over the

next couple of years. However, reduction in device costs and rise in use cases

are equally important trigger points to increase traction in global 5G progress.

In a spectrum-starved country, most good quality sub-GHz and mid-band

spectrum are already under existing 2G/4G technology use. In India and globally,

there is an option to deploy 5G in the mid-band (3,300-3,600MHz) and the

700MHz band, until the spectrum in other sub-GHz band is eventually re-

farmed.

While both bands have sufficient quantity available for seamless 5G service, the

pricing of 700MHz is exorbitant at INR328b for 5MHz spectrum. Therefore, the

mid-band spectrum is best suited as it is priced lower at INR4.9b/MHz with

healthy available quantity.

However, given the coverage related difficulty of the mid-band spectrum, telcos

may deploy 5G with a fallback dependency on 4G. This could initially restrict 5G

investments significantly to only high data consumption locations.

Also, the recent initiatives on O-RAN (an interoperable network equipment

disintegrating hardware with software) and Reliance’s (RIL) in-house 5G product

development are steps that should help telcos create a fungible network with

flexibility to switch vendors as per their requirements/pricing.

The spectrum and network dilemma

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Research Analyst: Aliasgar Shakir

(Aliasgar.Shakir@motilaloswal.com)

Suhel Shaikh

(Suhel.Ahmad@MotilalOswal.com) /

Anshul Aggarwal

(Anshul.Aggarwal@motilaloswal.com)

Investors are advised to refer through important disclosures made at the last page of the Research Report.

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Telecom | Update

5G and renewal capex

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A pertinent question is what should 5G potentially cost? Investments in three

key large components for a 5G network – Spectrum, Sites and Fiber on mid/low-

band spectrum with pan-India coverage – would stand at INR2.3t/INR1.3t, which

should reduce to INR1.3t/INR788b for coverage of only Metros and ‘A’ circles.

With reduced coverage and INR1.5m cost/site, this could reduce to INR1.6t

(mid-band) for pan-India coverage.

Even assuming rollout starting from FY23E,

a staggered deployment over the next 4-5 years (in line with 4G investment

trend) could insulate the impact to a large extent.

Undoubted, the quantum of investment is exorbitantly high given the stressed

balance sheet of telcos and the low prevailing ARPUs. Therefore, we believe in

the initial phase, telcos may selectively choose spectrum in a few circles and run

5G for select enterprise-driven Internet of Things (IoT) operations.

That said, the expiry of spectrum for RJio’s 115MHz quantity in the 800MHz

band acquired/shared from RCOM in 19 circles, Bharti’s 57Mhz quantity in the

1,800MHz band and VIL’s 37.8MHz/6.2Mhz quantity in the 1,800MHz/900MHz

band are attractive good quality spectrum and would be up for renewal over the

next 6-12 months. This would cost RJio/Bharti/VIL INR280b/INR129b/INR83b at

reserve price.

Aggressive bidding to capture additional spectrum could be limited as there are

only three telcos and decent supply of spectrum. With an FCF of

INR185b/INR198b, it would be manageable for RJio/Bharti in FY22. However, VIL

should be in trouble with piling debt, low EBITDA and liquidity concerns.

Even as 5G is progressing well globally, the gradual ecosystem development,

limited revenue model & use case, and spectrum pricing woes, 5G development

in India is still a bit far-fetched and India will continue to fully leverage 4G

network capabilities.

New vendors across markets are launching 5G devices. However, for widespread

5G deployment, device ecosystem development at affordable prices holds the

key. Expectations of 5G handset prices declining to sub-USD150, particularly in

China, which is aggressively rolling out 5G services, is a key growth driver.

5G use cases can be categorized as (a) Business to Consumer (B2C), which offers

increased speed. This could take the longest period to launch as unlike other

countries, India is yet to fully leverage 4G speeds with increase in network

densification, (b) Fixed Wireless Access (FWA), could be selectively used to

deliver high speed data for homes where FTTH deployment is difficult and not

cost effective, (c) Business to Business customized offering for enterprise

customers, providing Machine-to-Machine (M2M) and IoT connectivity in a

closed network hub with limited investment and faster break-even.

The other Ultra-Reliable Low-Latency Communication (URLLC) services like

driver-less cars and outdoor VR are future prospects, dependent on

development of the ecosystem.

5G rollout hinges on use cases and ecosystem development

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16 October 2020

2

Telecom | Update

Valuation and view

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Bharti:

We have factored in spectrum renewal cost of INR129b for FY22E. We

value Bharti on SOTP basis to arrive at a target price of INR650/share. We assign

EV/EBITDA of 12x to the India business and 6x to the Africa business on FY22E

basis. We expect Bharti to generate post interest FCF of INR198b in FY22E even

without any tariff hike. After factoring in spectrum renewal, FCF could stand at

INR57b, and subsequently, be used for deleveraging. Strong FCF, improving

RoCE and the expectation of an incremental price hike should garner better

valuation for Bharti.

Maintain Buy.

RJio:

We have factored in spectrum renewal cost of INR280b at reserve price.

We value RJio assigning EV/EBITDA multiple of 16x on Sep’22E EBITDA to arrive

at TP of INR1,125. Our higher multiple captures the transformation of RJio from

a telecom company to a digital player, which provides growth opportunities

from additional revenue streams, potential price hikes and market share gains.

VIL:

We have factored in spectrum renewal cost of INR83b at reserve price.

Despite the Supreme Court’s (SC) verdict of giving a 10-year timeline to repay

AGR dues, VIL’s liquidity remains in a precarious position with EBITDA of INR69b

in FY21 (pre Ind-AS 116) and current net debt of INR1.7t (including the AGR

liability). This leaves limited upside for equity shareholders assuming EV/EBITDA

multiple of 8x. We maintain

Under Review.

16 October 2020

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Telecom | Update

Progress on 5G

5G commercially launched but yet to achieve scale

5G saw its first commercial launch in South Korea in Apr’19. Post that, it was

commercially launched in North America and China in Oct’19. As at Jan’20, 46

operators have launched 5G services in 26 markets globally and total 79 operators

have announced plans to launch 5G services across an additional 39 markets.

Commercial 5G launches increased to 75 by Jul’20, depicting the pace of new

commercial launches (Refer

Exhibit 1).

However, due to small scale of deployment

and limited launches, the subscriber base remained a mere ~10m (China is leading

with subscriber base of ~5m). Additionally, 5G coverage has reached 50 cities in

China with a lead in the number of base stations at 86k.

Exhibit 1: 5G commercially available in 26 markets globally; Expected to launch in 39 more markets

Source: GSMA Intelligence

5G Subscriber base to reach 2.8b by 2025; more operators to come in

Scale of 5G was expected to become sizeable in CY20. However, the global

lockdowns led by the COVID-19 pandemic has slowed its deployment pace. Still,

~190m subscribers are expected to be on 5G by end-CY20 with China and South

Korea taking the lead. While China has already added over 80m 5G users as at

May’20, South Korea plans to achieve nationwide 5G coverage by CY21.

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Telecom | Update

In China, telecom service provider’s (TSP’s) have started to build large scale 5G

coverage. In Japan, the leading TSP’s launched 5G services in CY20. Overall, China,

South Korea and Japan are expected to acquire 170m (of total 190m) 5G users

during CY20. By end-CY25, 5G subscriber base should reach 2.8b with China having

~1b users (Refer

Exhibit 2).

Exhibit 2: 5G subscribers expected to reach 2.8b in CY25 with China having ~1b users

Region (m)

North America

Latin America

Western Europe

Central and Eastern Europe

North East Asia

China*

South East Asia and Oceania

India, Nepal and Bhutan

Middle East and North Africa

Sub-Saharan Africa

Total

2019

2025E

1

320

-

90

-

290

-

160

10

1,320

5

1,080

-

270

-

230

1

80

-

30

12

2,790

*Includes in North East Asia, Source: Ericsson Mobility Report 2020

Exhibit 3: Telecom subscription by technology (b)

Includes FWA connections but not IoT connections, Source: Ericsson Mobility Report 2020

China leading the pack with largest network rollout

While launching 5G services, China has already had over 86k 5G base stations

covering 50 cities, which increased to 250k by May’20. China is planning to deploy a

total of 600k (20% of total 3m 4G base stations) base stations by end-CY20 through

its three players – China Mobile, China Telecom and China Unicom. Of the total 600k

target, 300k is expected to be deployed by China Mobile, while the remaining half

should be deployed by China Telecom and China Unicom. Earlier only three players

were granted 5G license in China, which has now increased to four players.

Interestingly, a broadcasting company – China Broadcasting Network – has been

granted 5G license with no legacy of telecom network. The new player is currently in

the planning phase given that it may have to build a full fledged 5G network with no

4G network to fall back. South Korea and some European countries are also

deploying 5G network, however, the scale is quite small v/s China.

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Telecom | Update

Exhibit 4: China is targeting to deploy 600k 5G site by end-CY20

Sites during launch

86,000

Sites in May'20

250,000

Target for 2020 end

600,000

Source: Media articles

India to be influenced by China

India is also a price-conscious and mass-market like China. Therefore, we believe

device and BTS ecosystem in India would be influenced by China. In China, mass

subscribers would prefer low-cost 5G devices, which in turn would drive higher

production. This should lead to technological advancement and economies of scale,

thereby lowering device prices further.

India’s global gap v/s peers reduced

Historically, India lagged behind its developed counterparts by 8-10 years in

launching a new technology. In developed nations, 2G was launched in CY91-92

while in India, it was launched in the early-CY00s. Similarly, 3G was launched in

developed parts in early-CY00s, whereas in India, it was launched in CY11-12.

However, the gap shortened to just 3-5 years for 4G, which was adopted in CY10-12

by developed countries v/s CY14-16 in India. This was triggered by RJio’s launch of

full service 4G network and attractive pricing to create product differentiation and

grab market share, which forced the entire ecosystem (device, sites, use cases) to

upgrade. In the case of 5G, since there is no new player launching, India’s

development, will be linked to (a) affordable equipment, (b) spectrum pricing, (c)

increasing use cases, and (d) revenue opportunities.

Exhibit 5: India lags behind developed nations in adoption of new technology

Source: MOFSL

16 October 2020

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Telecom | Update

The spectrum and network dilemma

Globally adopted spectrum

There are three categories of spectrum – low band (below 1GHz), mid band (1-

6GHz) and high band (above 12GHz). Given that India is a follower in 5G

deployment, its spectrum usage would depend on the spectrum utilized for 5G

globally. As 2G, 3G and 4G technology have already occupied low band globally,

>80% of 5G technology is being deployed on mid band (China Telecom and China

Unicom). Only four operators are using high band to deploy 5G technology.

Exhibit 6: Band-wise category of spectrum

Source: Broadband library

Exhibit 7: Global snapshot of allocated/targeted 5G spectrum

Source: Qualcomm presentation

16 October 2020

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Telecom | Update

Spectrum options in India

Currently, there are two fresh spectrums available in India – 700MHz (low band

spectrum) and 3,400-3,600MHz (mid band spectrum). Initially, we expect 5G rollout

to occur in the mid band spectrum in selective pockets. Over time, lower band

spectrum used in 2G/4G could be re-farmed as the previous technology fades.

Typically, minimum mid band spectrum requirement per operator is 80-100MHz in

each circle. Spectrum utilized for 4G was 40MHz, so an advanced technology should

be provided with higher spectrum to offer spectral efficiency and optimize cost.

Presently, there is 175MHz available in the mid band (3.4GHz-3.6GHz) spectrum,

which could provide ~50MHz in the initial period while an additional 100MHz could

be made available in the 3,300-3,400MHz band.

Eventually, 5G may move on to more efficient lower bands

In India, 4G was initially launched by Bharti and RJio on the Time Division Duplex

(TDD) band (2.3GHz). This was due to expectations that full advantage and better

capacity could be offered with the new generation technology if more spectrums

were offered. Also, lower band was already utilized in legacy 2G technologies. But

later, 4G was ramped up in 1,800MHz band and then across other bands such as

800MHz, 900MHz, 2,100MHz and even on 2,500MHz. We expect a similar pattern

for 5G, wherein it would initially launch in the mid-to-high spectrum band and later

get re-farmed to lower bands as the old technology fades out. However, this could

take longer as 4G remains a robust technology and is yet to reach its optimum

utilization. Further, telcos still need to garner healthy returns on their 4G

investments. Therefore, we expect 4G to go on for another decade with parallel 5G

operation.

5G investments – Will it drown telcos? 5G network architecture to decide

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Before envisaging the amount of investments 5G would require, the need is to

decipher the kind of network architecture that telcos would choose. This would

eventually decide the scale of investment in 5G.

There are two kinds of network architecture for 5G deployment – (a) Non-

Standalone, and (b) Standalone. Non-Standalone is not an independent network

and could fall back on 4G when 5G network is not available, and therefore,

consumers could still enjoy seamless connectivity. In this architecture, up-

linking, call control, signaling, mobility handling, etc. would happen on 4G

network but capacity would get boosted to 5G. Under this network architecture

investment could be done selectively and therefore may be limited. Under the

Standalone architecture, the network would be independent with ubiquitous

coverage, providing better coverage and capacity than non-standalone and

therefor entail huge investments.

For instance, since RJio built the complete 4G IP network from scratch, it was

able to create huge network capacity throughput but which required enormous

investments. On the other hand, other Indian telcos upgraded 3G to 4G, which

required staggered network capacity increase, and in the interim, faced lower

throughputs.

16 October 2020

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Telecom | Update

Exhibit 8: Standalone v/s Non-Standalone 5G network

Source: Samsung

Globally, limited traction seen in standalone networks

Until last year, globally all operators deployed 5G on the Non-Standalone network.

However, China, South Korea and Germany have granted license to one operator to

rollout on a Standalone basis. Further, countries like South Korea could go for carpet

coverage of 5G as it has lower land mass (mere 3% of India) and high ARPU paying

customers. In China, a fourth player, a broadcasting company – China Broadcasting

Network – has been granted 5G license. However, the new player is currently in

planning phase and is not deploying network.

5G investment to be incremental on 4G according to use case development

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In our opinion, India could see rollout of 5G on a need basis – it could be used to

offload traffic in highly congested areas and in areas of high ARPU paying

customers. Also, customer usage through EMBB (Enhance Mobile Broadband)

could improve data capacity and throughputs (in terms of lead time and speed)

by Non-Standalone 5G network.

Another use case could be Ultra Reliable and Low Latency Coverage (URLC).

There are two types of URLCs – (a) Localized – Manufacturing set up could use

automation on 5G to improve efficiency, which may be done on Non-Standalone

basis, and (b) Requirements like autonomous/driver-less cars may be done on

Standalone basis but that seems far-fetched in India as of now (more on this in

the next section). Therefore, the Standalone network could be built at a later

stage as its use case increases. Thus, initial 5G network could be rolled out on

the existing 4G network and that too in a staggered manner against initial

presumption of carpet coverage. This would require limited number of

additional sites for 5G rollout and would keep the initial investment required

under check.

16 October 2020

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Telecom | Update

Macros v/s small cells to address coverage requirements

In a Non-Standalone set-up, use of macro sites may be done for broader coverage as

it has better cost economics and returns while small cells could address the

coverage gaps and the locations where installing macro sites are not feasible. One

macro site is equivalent to 12-15 small cells, fiber, battery backup, etc. Thus, the

initial phase of the rollout is expected to be through macro sites. Later small cells

could be used to fill the dark spots.

Massive MIMO to cushion coverage loss

Use of mid-high band spectrum comes along with more coverage losses, which

increases the number of site requirement. However, telcos’ could leverage massive

Multiple Input Multiple Output (MIMO) to mitigate the coverage loss. Furthermore,

eventually 5G may move to a lower band as the previous technology fades out,

which would solve the coverage challenge in the longer run.

O-RAN – the interoperable and flexible network

O-RAN disaggregates hardware and software in wireless network to create open

interface between them. This helps the network to support open interfaces and

common development standards, to deliver multi-vendor, interoperable networks

and aids in avoiding any vendor lock in. This technology is expected to have

significantly lower deployment and maintenance costs, reduce complexity and

improve reliability.

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O-RAN is capable of reducing network capex and opex through (a) a prosperous

multi-vendor ecosystem with scale economics, enabling a more competitive and

vibrant supplier system, and (b) enabling faster innovation via a larger

ecosystem (a native cloud feature of O-RAN), allowing scale-out designs for

capacity, reliability and availability, rather than expensive scale-up designs.

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O-RAN is capable of improving network efficiency and performance through

continually monitored and more real-time close-loop control.

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It could import new capability with great agility via easy software upgrades with

its native cloud infrastructure.

O-RAN, telcos getting attracted

The current equipment market has three large players – Nokia Siemens, Ericsson

and Huawei. The global telecom market and the current hardware embedded with

software makes it restrictive for telcos to switch vendors even at lower costs. Thus,

telcos have been pushing for disintegration of hardware from software to offer

flexibility, cost efficiency and agility. Recently, many operators have discussed the

deployment of O-RAN.

Till date, Rakuten Mobile is the first and only operator to launch a network based on

this technology. The Vodafone group is another strong proponent of this

technology, spearheading industry bodies like the Telecom Infra Project (TIP) and O-

RAN Alliance. In the recent AGM, RIL announced that it has built an entire 5G

solutions in-house and is waiting for spectrum to run tests. The company is looking

to also export 5G solutions post its success in India. It is leveraging its investment in

Radisys to move to O-RAN solutions. While this would have less impact on the

equipment cost, it should improve network efficiency and flexibility.

16 October 2020

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Telecom | Update

Exhibit 9: Network with traditional RAN

Source: Sterlite Technologies Limited

Exhibit 10: Network with Open RAN

Source: Sterlite Technologies Limited

16 October 2020

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Telecom | Update

Exhibit 11: Network with open, disaggregated and virtualized RAN

Source: Sterlite Technologies Limited

Exhibit 12: Benefits of Open RAN Solutions

Multivendor

ecosystem

Cost optimization

Flexibility

Enhanced security

Virtualization

Source: Sterlite Technologies Limited

16 October 2020

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Telecom | Update

Exhibit 13: Features of open solutions, disaggregation and virtualization

Open solution

•Open interfaces and source codes

•Non-proprietary

•Aligned with standards developed by open

forums

Disaggregated

•Abstraction of hardware from software layer

•Centralized control panel

•Individual data plane

Virtualization

•Software defined networking

•Optimized use of hardware resources

•Scalable on the go

Source: Sterlite Technologies Limited

16 October 2020

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Telecom | Update

5G and renewal capex

5G carpet coverage to require exorbitant investments

5G investments would be required in Spectrum, Sites and Fiber.

Spectrum investments

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For low band 700MHz spectrum,

capex requirement would be huge due to low

band spectrum being expensive as it provides more coverage and requires lesser

sites. As per the TRAI’s latest price recommendation, 10MHz of this spectrum

band across India would require an investment of INR656.8b. This investment

requirement would reduce to INR463.4b, if the spectrum is to be issued for

Metro and ‘A’ circles (Refer Exhibit 16).

For mid band spectrum:

As per the TRAI’s latest price recommendation,

100MHz mid band spectrum across India would require an investment of at

least INR490b at the reserve price. This would increase in case the bidding price

is higher. Investment requirement would reduce to INR348b (at reserve price), if

the spectrum is to be issued for only Metros and ‘A’ circles (Refer Exhibit 15).

For pan-India coverage, on low band spectrum

assuming total sites’

requirement as per 2G coverage should be ~200k. Cost/site based on some

Chinese telcos’ procurement is estimated at ~INR2-2.5m. As India may not do it

at such a large scale, it may not get attractive pricing. However, since the

deployment may be in 2-3 years, the price of equipment should certainly

reduce. Thus, at cost of INR2m/site, total investment for development of 200k

sites is estimated at ~INR400b. If the sites are required for only Metros and ‘A’

circles, the total requirement of sites should reduce to half i.e. 100k, as these

circles would require higher site density. Subsequently, the total investment too

would reduce to INR200b.

On the other hand, site requirement could be 4x in case of mid band spectrum,

taking the total site requirement to ~800k/400k for coverage of pan-

India/Metros and ‘A’ circles. Number of sites’ required for pan-India coverage is

higher than 4G (453k in 4G) as 4G was deployed on 1,800MHz and 2,300 MHz

while we are assuming 5G to be deployed on an even higher band. Thus, capex

requirement would increase to INR1.6t/INR800b for coverage of pan-

India/Metros and ‘A’ circles.

Assuming lower coverage of 600k site requirement for pan-India coverage and

cost/site of INR1.5m, site capex would be INR900b.

Sites

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5G rollout over five years (in line with 4G) could be managed through FCF

In order to evaluate the intensity and timeline of 5G capex, we projected 5G

investments on the basis of 4G investments timelines and intensity. Assuming telcos

deploy 5G investments over a 5-year period starting FY23E, the annual site capex

would be INR320b/INR180b in a normal/lower coverage scenario. Thus both

Bharti/RJio would be able to manage these exorbitant investments from their

increased FCF generation, owing to the expected tariffs hikes.

This investment intensity is in line with the 4G investments which broadly happened

during FY15-20. For Bharti, total spectrum investment stood at INR263b, assuming

16 October 2020

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Telecom | Update

1,800MHz and 2,300MHz spectrum as 4G bands. Additionally, total 4G network

capex is estimated to be INR735b (assuming 80% of Bharti’s cumulative mobile India

capex toward 4G during this period), implying cost/site of INR1m. (Refer

Exhibit 14).

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Fiber capex:

Assuming pan-India fiber requirement of ~2.5m km and cost/km of

fiber layout at ~INR100,000, the total investment requirement is estimated at

INR250b. Considering only Metros and ‘A’ circles, fiber requirement should be

~0.25m km and cost/km of fiber layout at ~INR500,000 (as cost of land in metros

would be higher than other areas), total investment requirement is estimated at

INR125b.

Thus, for mid band/low band spectrum, overall capex requirement for pan-India

coverage would stand at INR2.3t/INR1.3t including spectrum, cell sites and fiber,

which would reduce to INR1.3t/INR788b for coverage of only Metros and ‘A’ circles.

We believe the investment requirement is quite high given the telcos’ stressed

balance sheet and low prevailing ARPUs. In a recent earnings call, Bharti’s

management highlighted the same and mentioned that they cannot afford such

expensive spectrum at such low level of ARPU. Thus, we expect 5G rollout to be

incremental, need-based and further push the case for tariff hikes.

Exhibit 14: Total 4G capex over FY15-20 (taking Bharti as proxy)

Spectrum capex on 4G (INR b)

Broadband cell sites

Capex/site (m)

Cell site cost (INR b)

Total 4G capex (INR b)

Bharti's Mobile India capex from 2015 to 2020

Proportion of 4G capex (%)

Proportion of 3G capex (%)

263

4,52,957

1.0

471

735

919

80%

20%

Source: MOFSL, Company

Exhibit 15: Reserve price of 3.4GHz-3.6GHz spectrum

Circles

LSA

Mumbai

Delhi

Kolkata

Maharashtra

TN & Chennai

AP

Karnataka

Gujarat

UP-East

Rajasthan

Kerala

MP

UP(W)

Punjab

West Bengal

Haryana

Bihar

Orissa

Assam

HP

J&K

North East

Total

Available

Spectrum

175

175

175

175

175

175

175

175

175

175

175

175

175

175

175

175

175

175

175

175

175

175

3850

Reserve price/MHz (INR m)

840

690

260

550

150

420

160

410

230

160

140

140

170

130

80

80

130

40

70

30

20

20

4,920

Price for 100 MHz (INR m)

84,000

69,000

26,000

55,000

15,000

42,000

16,000

41,000

23,000

16,000

14,000

14,000

17,000

13,000

8,000

8,000

13,000

4,000

7,000

3,000

2,000

2,000

4,92,000

Source: TRAI, MOFSL

Metro + A circles

B circles

C Circles

16 October 2020

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Telecom | Update

Exhibit 16: Reserve price of 700MHz spectrum

Circles

LSA

Mumbai

Delhi

Kolkata

Maharashtra

TN & Chennai

AP

Karnataka

Gujarat

UP-East

Rajasthan

Kerala

MP

UP(W)

Punjab

West Bengal

Haryana

Bihar

Orissa

Assam

HP

J&K

North East

Total

Available

Spectrum

35

35

35

35

35

35

35

35

35

35

35

35

35

35

35

35

35

35

35

35

35

35

770

Reserve price/MHz (INR m)

11,220

9,150

3,470

7,290

1,990

5,570

2,190

5,460

3,050

2,110

1,900

1,900

2,300

1,770

1,050

1,130

1,750

540

920

370

300

250

65,680

Price for 10 MHz (INR m)

1,12,200

91,500

34,700

72,900

19,900

55,700

21,900

54,600

30,500

21,100

19,000

19,000

23,000

17,700

10,500

11,300

17,500

5,400

9,200

3,700

3,000

2,500

6,56,800

Source: TRAI, MOFSL

Metro + A circles

B circles

C Circles

Exhibit 17: Capex requirement for 5G on low band spectrum

Investments (INR b)

Spectrum Investments

Cell site investment

Sites required

Cost/site

Cell Site cost (INR m)

Fiber investment

Route km

Cost/km

Fiber Cost (INR m)

Total Investments

Pan India

657

200

2,000

400

2,500

100

250

1,307

Metro and A Circles

463

100

2,000

200

250

500

125

788

Source: TRAI, MOFSL

Exhibit 18: Capex requirement for 5G on mid band spectrum

Investments (INR b)

Spectrum Investments

Cell site investment

Sites required

Cost/site

Cell Site cost (INR m)

Fiber investment

Route km

Cost/km

Fiber Cost (INR m)

Total Investments

Pan India

492

800

2,000

1,600

2,500

100

250

2,342

Metro and A Circles

348

400

2,000

800

250

500

125

1,273

Source: TRAI, MOFSL

Exhibit 19: Annual 5G cell site capex and impact on RoCE and FCF (Normal Scenario – taking Bharti as proxy)

Amount in INR b

Total capex

Other capex

Bharti's 4G Mobile India capex

% of total

yoy growth %

5G cell site capex

EBITDA

yoy growth %

Capital Employed

Cash RoCE

Net debt

Interest

FCF post Interest

FY20 FY21E FY22E FY23E FY24E FY25E FY26E FY27E

Comments

254 203 332 499 479 464 451 441

In FY22, assumed spectrum renewal capex of INR130b

102

82

82

82

82

82

82

82

Assumed constant since FY21

151 121 251

97

78

62

50

40

60% 60% 60% 19% 16% 13% 11%

9%

Assumed constant for FY21 and FY22

-20% 107% -20% -20% -20% -20% -20%

Assumed 20% degrowth from FY23

320 320 320 320 320

Assuming 5 years for full coverage starting in FY23

305 374 562 618 679 747 822 904

23% 50% 10% 10% 10% 10% 10% Assumed price hike in FY22 and 10% growth from FY23

2241 2032 1908 2407 2886 3350 3802 4243

14% 18% 29% 29% 26% 24% 23% 22%

EBITDA/capital employed

881 1102 999 859 819 690 471 150

85

84

89

79

71

64

49

26

-34

87 140

40 129 219 321 436

Source: Company, MOFSL

16 October 2020

16

Telecom | Update

Exhibit 20: Annual 5G cell site capex and impact on RoCE and FCF (Lowe coverage Scenario – taking Bharti as proxy)

Amount in INR b

Total capex

Other capex

Bharti's 4G Mobile India capex

% of total

yoy growth %

5G cell site capex

EBITDA

yoy growth %

Capital Employed

Cash RoCE

Net debt

Interest

FCF post Interest

FY20 FY21E FY22E FY23E FY24E FY25E FY26E FY27E

Comments

254 203 332 359 339 324 311 301

In FY22, assumed spectrum renewal capex of INR130b

102

82

82

82

82

82

82

82

Assumed constant since FY21

151 121 251

97

78

62

50

40

60% 60% 60% 27% 23% 19% 16% 13%

Assumed constant for FY21 and FY22

-20% 107% -20% -20% -20% -20% -20%

Assumed 20% degrowth from FY23

180 180 180 180 180

Assuming 5 years for full coverage starting in FY23

305 374 562 618 679 747 822 904

23% 50% 10% 10% 10% 10% 10%

Assumed price hike in FY22 and 10% growth from FY23

2241 2032 1908 2267 2606 2930 3242 3543

14% 18% 29% 30% 28% 27% 27% 27%

EBITDA/capital employed

881 1102 999 859 679 405

27 -465

85

84

89

79

65

46

18 -19

-34

87 140 180 275 377 492 621

Source: Company, MOFSL

What would be the 5G capex for Mumbai or Delhi?

We believe the initial 5G rollout would be in India’s top cities like Mumbai, Delhi,

etc. Based on the TRAI’s latest reserve price, capex requirement for obtaining

100MHz mid band spectrum in Mumbai would be ~INR84b, which could increase if

the bidding price is higher than the base price. Assuming ~9k sites would be

required for coverage with cost at INR2m/site, the total capex requirement for the

sites would be INR18b, taking the total capex to ~INR100b. Similarly, capex

requirement for 5G rollout in Delhi would be INR87b – assuming 100MHz mid band

spectrum at base price (INR69b) – with the site requirement and cost being the

same as Mumbai.

Capex for 4G spectrum renewal is around the corner







Bharti:

The next spectrum auction including both renewal and 5G spectrum

bands could be least a year away.

In the upcoming auction, Bharti’s 57MHz is up for renewal in the band of

1,800MHz (included in available spectrum). Bharti’s spectrum renewal cost

could be ~INR130b at the current reserve price. This could increase to

INR194b/INR259b, if the final price is 1.5x/2x of the reserve price, but given that

there is healthy proportion of spectrum available in each circle and now only

three players are left, the price may not escalate significantly. With FCF of

INR101b/INR198b in FY21/22E, Bharti should be able to comfortably manage it.

But it could reduce the company’s post interest FCF to INR57b and increase its

net debt to INR771b (v/s INR644b expected earlier).

RJio:

RJio entered into both spectrum sharing and trading agreement with

RCOM to utilize its 800MHz spectrum – substantial portion of this is coming up

for renewal in CY21. RJio may eye buying this spectrum in the upcoming auction.

To maintain its spectrum strength, RJio would need to buy 115MHz of spectrum

in the 800MHz band (included in available spectrum). Our workings suggest that

RJio would require capex of INR280b for spectrum renewal at the current

reserve price. However, capex could increase to INR426b/INR568b in case the

final price is 1.5x/2x of the reserve price. As Bharti and VIL have not yet

deployed the 800MHz spectrum, they may be wary of acquiring it. RJio has

sufficient liquidity from the recent stake sale to furnish the capex requirement

and FCF of INR32b/INR185b in FY21/22E.

16 October 2020

17

Telecom | Update



VIL:

VIL’s 37.8MHz in 1,800MHz spectrum band and 6.2MHz in 900MHz

spectrum band are up for renewal in CY21. Its renewal cost could be INR83b at

the current reserve price, which could increase to INR124b/INR165b in case the

final price after bidding is 1.5x/2x of the reserve price. Given the three player

market and healthy proportion of spectrum available in each required circle, the

possibility of aggressive bidding seems limited. Excluding AGR dues, this could

increase VIL’s net debt to INR1,397b from our current estimate of INR1,313b for

FY22E. Given the weak liquidity condition of VIL, the company may find it

challenging to renew spectrum and may explore opting out of some spectrum

renewal

Exhibit 21: Capex required by Bharti for spectrum renewal at reserve price (INR m)

Circle

Gujarat

Haryana

Kerala

MP

Maharashtra

Mumbai

Tamil Nadu

UP West

Total

Quantity

(MHz)

6.2

6.2

6.2

8

8.2

9.2

6.8

6.2

57

Available quantity

(MHz)

17.8

19.4

16.4

15

22.2

15.6

17.6

19.4

Reserve price/

MHz

2,730

570

950

950

3,650

5,610

1,000

1,150

Total investment required

at reserve price

16,926

3,534

5,890

7,600

29,930

51,612

6,800

7,130

1,29,422

Source: MOFSL, TRAI

Exhibit 22: Capex required by RJio for spectrum renewal at reserve price (INR m)

Circle

Delhi

Mumbai

Kolkata

MH

Gujarat

AP

Karnataka

Tamil Nadu

Kerala

Punjab

Haryana

UP W

UP E

Rajasthan

MP

WB

HP

Bihar

Orissa

Total

Quantity

(MHz)

6.25

5

7.5

6.25

7.5

6.25

6.25

6.25

6.25

7.5

5

7.5

6.25

5

5

6.25

5

5

5

115

Available quantity

(MHz)

12.5

10

12.5

15

6.5

13.75

13.75

13.75

13.75

11.25

10

12.5

12.5

12.5

12.5

12.5

10

12.5

11.25

Reserve price/

MHz

6400

7270

1600

5100

3850

3900

1920

1740

1570

1570

570

1610

2510

2660

1430

740

240

1360

470

Total investment required

at reserve price

40000

36350

12000

31875

25025

24375

12000

10875

9812.5

11775

2850

12075

15687.5

13300

7150

4625

1200

6800

2350

280125

Source: MOFSL, TRAI

16 October 2020

18

Telecom | Update

Exhibit 23: Capex required by VIL for spectrum renewal at reserve price (INR m)

Circle

Delhi

Karnataka

Tamil Nadu

Punjab

UP E

Rajasthan

HP

Total

Circle

Tamil Nadu

Total capex

requirement

VIL's 1800MHz spectrum up for renewal in 2021

quantity

Available

Reserve

Total investment required at

(MHz)

quantity

price/MHz

reserve price

8

25.4

4570

36560

8

21

1090

8720

1

17.6

1000

1000

6.2

19.4

880

5456

6.2

15

1530

9486

6.2

16.8

1050

6510

2.2

19

180

396

37.8

68128

VIL's 900MHz spectrum up for renewal in 2021

quantity

Available

Reserve

Total investment required at

(MHz)

quantity

price/MHz

reserve price

6.2

17

2350

14570

82698

Source: MOFSL, TRAI

16 October 2020

19

Telecom | Update

5g rollout hinges on use cases/ecosystem development

Four broad use cases – B2C, B2H, B2B, B2V

While 3G/4G technology was primarily for customer usage, 5G is not just limited to

Business to Customer (B2C), but it also extends to Business to Home (B2H), Business

to Business (B2B) and Business to Vertical (B2V).









Business to Customer (B2C):

Most of the speed related requirement for this

segment could be fulfilled through densification of 4G network as the most

intensive use is streaming of video without buffering. India lags behind many

countries in 4G download speed with 8.1Mbps (as per OpenSignal May’20

report). On the other hand, countries like Canada, South Korea, Japan, Norway,

the Netherlands, and Singapore enjoyed >30-50Mbps 4G download speed

before the launch of 5G services. Thus, India still has significant room to increase

its current 4G speed to ~5x. This would depend on many factors such as (a)

spectrum re-farming to LTE, (b) implementing advanced LTE through carrier

aggregation and massive MIMOs, and (c) network densification. However,

further increase in speed can come from 5G upgrade. Many futuristic

technologies such as VR glass and hi-tech gaming require lower latency and

better lead times. Similarly, many augment reality and virtual reality (AR/VR) use

cases require lower latency. While some requirements are indoors and could be

serviced through wire-line network, its penetration in India is very low. Further,

the new concept – 360 degree line – showcasing sports events live from many

angles require 5G.

Business to Home (B2H):

In India, penetration of fixed broadband is a mere ~7%

at ~20m subscriber base; the Indian government is targeting to achieve fixed

broadband penetration of 50% by FY22E. Even if the timelines are extended, we

believe this would require the support of Fixed Wireless Access (FWA) as it

complements Fiber to the Home (FTTH). While FTTH is feasible in large societies,

it is time and capital intensive for tier 2/3 towns. Thus, smaller towns could be

serviced through quick rollout of FWA 5G without the need of fiber deployment.

Business to Business (B2B):

There are large number of SMEs and MSMEs in

India (63m), which do not have proper connectivity. We believe wireless is the

way forward as fiber connectivity is time and capital intensive.

Business to Vertical (B2V):

These are specialized cases and require URLC, thus, it

could only be implemented on Standalone 5G network. Telcos could leverage

their existing enterprise relations to understand customer requirements.

Accordingly, they could build specialized Standalone network to cater to

customized enterprise services. These include smart manufacturing, smart

ports, power grids, smart lights, etc. While we expect it to progress at a slow

pace, respective industries need to come forward and work with telcos/OEMs to

find profitable solutions.

16 October 2020

20

Telecom | Update

Exhibit 24: Different use cases of 5G network

Source: IHS Markit

Production of 5G devices increasing, but pricing is key

Globally, the number of announced devices in 5G handsets and FWA CPE has

witnessed robust growth since CY19. Announced 5G phones more than doubled

since end-CY19 and increased 55% QoQ in 2QCY20. As at Jun’20, overall 135 5G

phones were launched (v/s 123 available phones in May’20), highlighting the pace

with which vendors are launching new 5G compatible phones. Total 29 vendors

either produced or announced plans to launch 5G phones while 53 vendors have

either produced or announced plans to launch 5G CPE devices.

Exhibit 25: Number of announced 5G phones/FWA CPE devices

Source: Media articles

16 October 2020

21

Telecom | Update

China – Crucial for low priced 5G handsets

In 9MCY19, 18 5G compatible smartphones were launched in China and >787k were

shipped. Currently, the base price of 5G handset is USD300 and we believe it should

reduce to USD150 i.e. INR10k for mass 5G adoption in India. China is targeting to

launch handsets at lower prices over the next 6-12 months, which may pick up

deployment and force India to sit up and take notice. Thus, 5G could gain traction

over the next 2-3 years in a staggered manner.

Valuation and view

Bharti – Buy with TP of INR650/share

Bharti remains in a sweet spot in the current environment to tap the increase in

EBITDA opportunity – either from the price hike required by VIL to stay afloat (more

likely) or from market share gains in case VIL shuts operations. VIL’s survival would

require sharp ARPU increase of ~INR90 in FY23E. Tariff hike of even half the amount

could take Bharti’s EBITDA to INR562b (assuming incremental EBITDA margin of

65%). Bharti could utilize its increasing profits to deleverage. We value Bharti on

SOTP basis by assigning 12x EV/EBITDA multiple to the India Wireless business and

6x to the Africa business on FY22E to reach a TP of INR650/share.

Maintain Buy.

Exhibit 26: Bharti Airtel – SOTP based on FY22E

EBITDA

(INR b)

India SA business (excl. towers)

Tower business (15% discount to fair value)

Africa business

Less net debt

AGR liability

Total Value

Shares o/s (b)

CMP

Upside (%)

345

134

Ownership

(%)

100%

53.5%

55.2%

Proportionate

EBITDA

(INR b)

345

74

EV/

EBITDA (x)

12

6

Fair Value

(INR b)

4,287

235

445

1165

260

3541

Value/

Share (INR)

786

43

82

214

48

650

5.5

413

57

Source: Company, MOFSL

RJio – TP at 1,125/share

RJio is currently enjoying market leadership position in a three-player market,

wherein all competitors have stretched their balance sheet. By leveraging its price

maker position, it could drive its ARPU and subsequently EBITDA. Furthermore, it is

transforming from a telecom company to a digital player, which we believe could

expand its revenue stream to multiple categories.

Jio Platforms has raised INR1,520.6b from stake sales to 13 investors with RIL now

holding ~66.48% equity stake on fully diluted basis. Of the total funds raised,

INR229.8b would be retained in Jio Platforms while the rest would be used for

Optionally Convertible Preference Shares (OCPS). The company could use these

funds to renew its spectrum in the upcoming auction and to roll out 5G.

We assign an EV/EBITDA multiple of 16x on Sep’22E EBITDA to arrive at TP of

INR1,125. The higher multiple captures the digital revenue opportunity, expected

gains from any potential tariff hikes and increasing market share, which are not built

into our estimates.

16 October 2020

22

Telecom | Update

Exhibit 27: RJio Valuation on Sep’22E EBITDA

Particulars

EBITDA

EV/EBITDA (x)

EV

Debt

Equity Value

Value Per Share

(INRb)

473

16

7,602

471

7,131

1,125

Source: Company, MOFSL

VIL – Under Review

Although the SC’s verdict on AGR has provided a slight ray of hope for VIL, its

liquidity position with EBITDA of INR69b in FY21 (pre Ind-AS 116) and current net

debt of INR1.7t (including AGR liabilities) puts it in a precarious situation. The

payments from Vodafone group, Bharti Infratel and EBITDA in this fiscal should

enable the company to manage in FY21. However, it would need a sizeable price

hike along with capital infusion to manage beyond that. In its last board meeting on

4

th

Sep’20, the company announced plans to raise INR250b from mix of equity and

debt.

VIL needs a huge amount of cash to service its debt, which leaves limited upside for

equity holders. We continue to place the company

Under Review

given the

uncertainty around its future outlook.

16 October 2020

23

Telecom | Update

NOTES

16 October 2020

24

Telecom | Update

Explanation of Investment Rating

Investment Rating

Expected return (over 12-month)

BUY

>=15%

SELL

< - 10%

NEUTRAL

< - 10 % to 15%

UNDER REVIEW

Rating may undergo a change

NOT RATED

We have forward looking estimates for the stock but we refrain from assigning recommendation

*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within

following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.

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4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report

5 Research Analyst has not served as director/officer/employee in the subject company

6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months

7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months

8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months

9 MOFSL has not received any compensation or other benefits from third party in connection with the research report

10 MOFSL has not engaged in market making activity for the subject company

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The associates of MOFSL may have:

- financial interest in the subject company

- actual/beneficial ownership of 1% or more securities in the subject company

- received compensation/other benefits from the subject company in the past 12 months

- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the

specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even

though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.

- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months

- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the

company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)

- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.

The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report

Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not

consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from

clients which are not considered in above disclosures.

Analyst Certification

The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the

research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.

Terms & Conditions:

This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and

may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent

of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in

nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,

representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The

report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial

instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as

customers by virtue of their receiving this report.

Disclaimer:

The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or

distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for

informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing

in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.

The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment

objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this

document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this

document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views

expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade

securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of

the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and

should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make

modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from

time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to

perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a

separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of

information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or

may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,

directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or

entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,

regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in

all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost

revenue or lost profits that may arise from or in connection with the use of the information.

The person accessing this information specifically agrees to exempt MOFSL or any of its

affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such

misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,

expenses that may be suffered by the person

accessing this information due to any errors and delays.

Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;

Website

www.motilaloswal.com.CIN

no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,

Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.

Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:

INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company

Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth

Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is

a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.

Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.

Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no

assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance

Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.

* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National

Company Law Tribunal, Mumbai Bench.

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